CRANIO ASSOCIATES v. ENCOMPASS INSURANCE COMPANY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6041-10T4

CRANIO ASSOCIATES, a/s/o

CARMEN MENDEZ,

Plaintiff-Respondent,

v.

ENCOMPASS INSURANCE COMPANY,

Defendant-Appellant.

________________________________________________________________

ArguedMarch 27, 2012 Decided April18, 2012

 

Before Judges Baxter, Carchman and Maven.

 

On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-1034-11.

 

Noel Santorelli argued the cause for appellant (Hardin, Kundla, McKeon & Poletto, P.A., attorneys; John F. McKeon, of counsel; Ms. Santorelli, on the briefs).

 

Lisa A. Arkin argued the cause for respondent (Ms. Arkin and S. Gregory Moscaritolo, on the brief).

 

PER CURIAM

This is an appeal by defendant Encompass Insurance Company (Encompass) from a trial judge's order that modified an arbitration award in Encompass's favor pursuant to the Alternative Procedure For Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30. The judge held that the arbitrator misapplied the facts to the governing law when she found that a second temporomandibular joint (TMJ) surgery performed by plaintiff Cranio Associates was not medically necessary. We conclude that the trial judge's decision stayed well within the boundaries established by N.J.S.A. 2A:23A-13. As a result, the present appeal must be dismissed in light of the sharp limitations on appellate review contained in N.J.S.A. 2A:23A-18(b).

I.

On July 24, 2008, Carmen Mendez was injured in an automobile accident when the airbag in her vehicle deployed, striking her in the jaw, face and head. A week later, a physician at Cranio diagnosed her as suffering from TMJ dysfunction, which he attributed to the motor vehicle accident. Encompass authorized conservative care including upper and lower TMJ orthotic appliances, office visits and other non-invasive treatment.

Mendez's symptoms did not improve after more than three months of treatment. She continued to experience pain and a clicking sound in her jaw as well as difficulty opening her mouth. As a result, Cranio ordered an MRI. The radiologist made the following findings in a November 7, 2008 report:

Mild anterior displacement of the right TMJ meniscus with reduction on open mouth views. Mild disruption of right-sided condylar translation is noted.

 

After receiving that report, Mendez's treating physician, Robert J. Federman, D.D.S., recommended minimally invasive right TMJ arthroscopic surgery, which Encompass authorized. The surgery was performed on May 1, 2009.

Despite the surgical intervention in May 2009, Mendez reported a generalized worsening of her symptoms when she resumed a normal diet. After the surgery, Cranio provided conservative care, including a splint, biofeedback, medication and dietary restrictions. Despite these renewed conservative treatment modalities, Mendez's symptoms did not abate.

Repeat MRI studies of Mendez's right TMJ were performed on October 13, 2009, revealing the same diagnoses as had existed prior to the May 1, 2009 TMJ surgery. The October 13, 2009 MRI report contained the following findings:

[A]nterior displacement of the right TMJ meniscus on closed mouth views with evidence of delayed reduction on open mouth views. Mild disruption of right sided condylar translation is noted.

 

A maxillofacial surgeon, Dr. David Hoffman, evaluated Mendez on December 1, 2009. He opined that despite the May 1, 2009 TMJ surgery, Mendez continued to suffer from right TMJ internal derangement, with a possible perforation of the TMJ disc. He recommended an open joint surgery, known as arthroplasty, of the right TMJ joint. When Cranio requested authorization from Encompass, Encompass denied approval.

Dr. Hoffman performed the arthroplasty surgery on January 4, 2010. The January 4, 2010 operative report notes that the right TMJ disc was in fact perforated, necessitating a right TMJ diskectomy and a right TMJ eminectomy to correct the joint displacement.

When Dr. Hoffman examined Mendez on April 26, 2010, approximately three months after the surgery, Mendez reported feeling "80 percent better" with "[g]ood range of motion." Dr. Hoffman concluded that Mendez was "[f]unctioning well."

Despite Encompass's agreement to pay for the May 1, 2009 TMJ procedure, Encompass ultimately reneged, and refused to pay. As Mendez's assignee, Cranio filed a petition for a PIP arbitration, see N.J.S.A. 39:6A-5.1, seeking payment for the two TMJ surgeries and related treatment. At the December 9, 2010 arbitration hearing, Cranio relied on the reports we have already discussed, as well as on an October 5, 2010 report prepared by Dr. Federman addressing the "medical necessity for [the] open TMJ surgical intervention" on January 4, 2010. In that report, Dr. Federman reviewed the clinical findings of all the providers who treated Mendez prior to the January 4, 2010 surgery, and also discussed the disc perforation that was found, and addressed, during that second surgery.

Dr. Federman's October 5, 2010 report contained the following justification of the medical necessity for the second TMJ surgery on January 4, 2010. Dr. Federman wrote:

Following the arthroscopic TMJ surgical intervention performed by Dr. DiRienzo on 5/01/09, Ms. Mendez reported a generalized worsening of clinical, subjective and objective symptomatology post surgically. The arthroplasty performed by Dr. Hoffman on 1/04/10 was medically necessary because, in my opinion, the patient would have continued to experience a progressive worsening of her temporomandibular joint condition that could have lead [sic] to a significant worsening of temporomandibular joint symptomatology, necessitating the need for more aggressive surgical procedures such as a prosthetic jaw joint procedure.

 

In Dr. Hoffman's post surgical findings dated 4/26/10, he states: "Carmen [Mendez] is post op right TMJ arthroplasty and is healing well. She says she is doing about 80 percent better. Good range of motion. Functioning well. Will see her back on an as needed basis."

 

It is therefore my opinion that the arthroplasty performed by Dr. Hoffman on 1/04/10 was not only medically necessary but resulted in a significant improvement of the patient's TMJ symptomatology post surgically.

 

Although the arbitrator entered an award in favor of Cranio directing Encompass to pay for the first TMJ surgery in May 2009, the arbitrator ruled in favor of Encompass concerning the second TMJ surgery on January 4, 2010. The arbitrator made the following finding:

I find [Cranio] has utterly failed to explain how [the right open joint arthroplasty surgery on January 4, 2010 was] clinically supported as an effective way to treat continued orofacial pain symptoms even though prior conservative treatment and arthroscopic surgery had already failed. Dr. Federman's statement that the arthroplasty surgery was necessary just because the patient "could have" . . . continued to experience a progressive worsening of her condition does not provide any clinical support for said surgery. In addition, [Cranio] has failed to address the IME doctor's warning[1] of the dangers that a misdiagnosis existed and his recommendation that [Mendez] should be examined by a neurologist of academic standing with all head and neck images being reevaluated. I find the IME doctor's opinion in this regard to be persuasive, compelling, and unrebutted by [Cranio]. In sum, I find that [Cranio] has failed to show that any of the . . . medical services or treatment rendered from 08/20/09 through 02/23/10 was consistent with the clinically supported symptoms [and] diagnosis [of Mendez's injury] . . . and failed to show that it was the most appropriate level of service that is in accordance with the standards of good practice and standard professional treatment protocols. As [Cranio] has failed to sustain its burden in regard to this treatment by a preponderance of the evidence, reimbursement for same is denied.

 

After the arbitrator denied Cranio's motion for reconsideration, Cranio filed a summary action in the Law Division pursuant to N.J.S.A. 2A:23A-13, arguing that the arbitrator improperly denied Cranio's request for reimbursement of the January 4, 2010 surgery and misapplied the law to the facts. Additionally, Cranio asserted that the arbitrator failed to consider the October 13, 2009 MRI report, the operative findings of disc perforation, or the patient's subsequent improvement after the January 4, 2010 surgery.

At the conclusion of oral argument on April 29, 2011, the judge ruled that the arbitrator committed prejudicial error in applying the applicable law to the issues and facts. The judge reasoned:

[T]he [arbitrator] refers to Dr. Federman's statement[.] . . . She simply dismisses it very quickly. Let me just get [the arbitrator's] words here:

 

Dr. Federman's statement . . . that the arthroplasty surgery was necessary just because the patient could have continued to experience a progressive worsening of her condition does not provide any clinical support for said surgery.

 

That's the only sentence [the arbitrator] refers to in [Dr. Federman's] entire statement which goes to all of the reasons why the surgery should have been performed, why it was necessary, why it was medically reasonable, and if this is the rationale for the arbitrator's decision, she's completely ignored all of the factual and medical reasons given by [Dr. Federman], and to my way of thinking, [the arbitrator] has ignored pertinent evidence that [Cranio] has submitted.

 

. . . .

 

It seems to me that [payment for the January 4, 2010 surgery] was justified and the [arbitrator] has misapplied the law to the facts and come up with a conclusion that's not supportable on the record.

 

[(Emphasis added).]

 

The court signed a confirming order May 20, 2011, requiring Encompass to pay for the January 4, 2010 surgery, and assessing against Encompass counsel fees in the amount of $4080 and costs in the amount of $230. On June 24, 2011, the judge denied Encompass's motion for reconsideration, and signed a confirming order on July 14, 2011.

On appeal, Encompass presents the following arguments for our consideration:

I. THE TRIAL COURT ERRED IN OVERTURNING THE ARBITRATION AWARD AS THE TRIAL COURT DID NOT ADHERE TO THE APPLICABLE STANDARD OF REVIEW AS REQUIRED BY N.J.S.A. 2A:23A-13 BECAUSE THE TRIAL COURT ALLOWED PLAINTIFF TO RAISE ISSUES AND LAW NOT RAISED BY PLAINTIFF IN SUPPORT OF THE SECOND TMJ SURGERY IN THE UNDERLYING ARBITRATION.

 

II. THE TRIAL COURT ERRED IN OVERTURNING THE ARBITRATION AWARD AS THE TRIAL COURT DID NOT ADHERE TO THE APPLICABLE STANDARD OF REVIEW AS REQUIRED BY N.J.S.A. 2A:23A-13 BECAUSE THE TRIAL COURT FAILED TO IDENTIFY THE CASE LAW THE UMPIRE ERRONEOUSLY APPLIED, AND HOW THIS MISAPPLICATION PREJUDICED THE PLAINTIFF.

 

During the pendency of this appeal, Cranio moved to dismiss Encompass's appeal. Cranio relies on N.J.S.A. 2A:23A-18(b), which declares that, following the trial court's judgment, "[t]here shall be no further appeal or review[.]"2

II.

The standards governing PIP arbitration proceedings are set forth in N.J.A.C. 11:3-5.6(f), which states:

The final determination of the dispute resolution professional shall be binding upon the parties, but subject to vacation, modification or correction by the Superior Court in an action filed pursuant to N.J.S.A. 2A:23A-13 for review of the award.

 

N.J.S.A. 2A:23A-13, which is part of the APDRA, permits a trial judge to modify the award rendered by the PIP arbitrator, but only in limited circumstances. Among those circumstances is subsection (f) which provides:

Whenever it appears to the court to which application is made, pursuant to this section, either to vacate or modify the award because the umpire committed prejudicial error in applying applicable law to the issues and facts presented for alternative resolution, the court shall, after vacating or modifying the erroneous determination of the umpire, appropriately set forth the applicable law and arrive at an appropriate determination under the applicable facts determined by the umpire. The court shall then confirm the award as modified.

 

[N.J.S.A. 2A:23A-13(f).]

 

After the Law Division has performed the function described in N.J.S.A. 2A:23A-13(f), the APDRA prohibits further appeals. N.J.S.A. 2A:23A-18(b). In Fort Lee Surgery Center, Inc. v. Proformance Insurance Co., 412 N.J. Super. 99, 102-03 (App. Div. 2010), we reviewed the narrow exceptions to APDRA's elimination of appellate review. We noted that in Mt. Hope Development Associates v. Mt. Hope Waterpower Project, 154 N.J. 141, 151-52 (1998), the Supreme Court held that APDRA's limitation on appellate review "does not apply to child support issues[.]" Fort Lee, supra, 412 N.J. Super. at 102. We also noted that in Morel v. State Farm Insurance Co., 396 N.J. Super. 472, 475 (App. Div. 2007), appellate review was permitted where the trial judge "applied the wrong standard of review and 'did not rule at all on plaintiff's specific claims.'" Fort Lee, supra, 412 N.J. Super. at 103.

As we concluded in Fort Lee, "our role is to determine whether the trial judge acted within APDRA's bounds. If so, then we are bound by N.J.S.A. 2A:23A-18(b) to dismiss the appeal." Ibid. Here, the judge held that the arbitrator committed "prejudicial error" - a circumstance that authorizes a trial judge's intervention under N.J.S.A. 2A:23A-13(f). In his oral opinion, Judge Graziano explained that the arbitrator erred by ignoring the considerable body of medical evidence that supported the medical necessity3 of the January 4, 2010 surgery. Our review of the record demonstrates that the judge was correct, as the arbitrator ignored the second MRI report of October 13, 2009, which demonstrated that plaintiff suffered from the same displacement of her right TMJ meniscus following the first surgery in May 2009 that she had been experiencing prior to that surgery, thereby demonstrating that the first surgery had not been successful. The record also demonstrates that the arbitrator ignored: the clinical finding by Dr. Hoffman that Mendez continued to suffer from right TMJ internal derangement and needed surgery to correct it; the January 4, 2010 operative report that revealed the perforation of the joint disc that was corrected by the January 4, 2010 open joint surgery; and Cranio's October 5, 2010 medical necessity report that reviewed the medical rationale for the surgery and described Mendez's considerable improvement after the surgery.

As Judge Graziano correctly found, the arbitrator failed to analyze, much less even mention, any of these objective findings and objective tests that supported the medical necessity of the January 4, 2010 open joint surgery. Consequently, the judge was correct when he held that, in accordance with N.J.S.A. 2A:23A-13(f), "the umpire committed prejudicial error in applying [the] applicable law to the issues and facts presented for alternative resolution[.]" The decision rendered by Judge Graziano -- requiring Encompass to pay for the January 4, 2010 surgery because it was medically necessary -- constituted a "vacating" of "the erroneous determination of the umpire[.]" N.J.S.A. 2A:23A-13(f). In reaching that determination, Judge Graziano "acted within APDRA's bounds." Fort Lee, supra, 412 N.J. Super. at 103. That being so, our role is at an end. Ibid. "[W]e are bound by N.J.S.A. 2A:23A-18(b) to dismiss the appeal." Ibid.

We recognize, as we observed in Fort Lee, id. at 104, that "not every instance in which a judge utters the phrase 'prejudicial error' will preclude appellate review" because "[t]he exercise of our supervisory function cannot be talismanically eliminated by the mere invocation of the words of the statute." Ibid. But here, where the unique circumstances described in Mt. Hope, supra, 154 N.J. at 151-52, or Morel, supra, 396 N.J. Super. at 475, are glaringly absent, appellate intervention is prohibited.

As in Fort Lee, where the trial judge was "able to provide a rational explanation for how the arbitrator committed prejudicial error, N.J.S.A. 2A:23A-18(b) requires a dismissal of [the] appeal . . . regardless of whether we may think the trial judge exercised that jurisdiction imperfectly." Supra, 412 N.J. Super. at 104. "Any broader view of appellate jurisdiction would conflict with the Legislature's expressed desire in enacting APDRA to eliminate appellate review in these matters."4 Ibid.

Appeal dismissed.

1[] The arbitrator's reference to the "warning" of misdiagnosis was contained in the April 29, 2009 IME report of Paul Markowitz, D.M.D., in which he stated that the "possibility of misdiagnosis exists." That report was prepared prior to the January 4, 2010 surgery that is the subject of this appeal. A later IME report prepared by Gary M. Heir, D.M.D. on September 23, 2010, concluded that there was no clinical justification for the January 4, 2010 TMJ surgery because "Dr. Federman reported a normal mandibular range of motion of 44 mm on October 6, 2009. Surgery of a joint with a normal mandibular range of motion is not supported."

2 Cranio's motion remains pending. Consistent with the disposition of this appeal, we have now granted Cranio's motion.

3 The applicable regulation, N.J.A.C. 11:3-4.2, defines "[m]edically necessary" as follows:

 

[T]he medical treatment or diagnostic test is consistent with the clinically supported symptoms, diagnosis or indications of the injured person, and:

 

(1) The treatment is the most appropriate level of service that is in accordance with the standards of good practice and standard professional treatment protocols including the Care Paths in the Appendix . . . [applicable to spinal injuries];

 

(2) The treatment of the injury is not primarily for the convenience of the injured person or provider; and

 

(3) Does not include unnecessary testing or treatment.

4 We note that our conclusion that the judge acted properly constitutes a rejection of the claim Encompass asserts in its Point II. For the reasons already expressed, we do not address Point I.